Why Lease?


80% of U.S. businesses lease finance at least one piece of equipment. It makes excellent sense in a variety of circumstances. Leasing allows 100% of the purchase price of the equipment to be financed so you won’t need to come up with a hefty down payment, and also allows for soft costs like shipping, installation and training to be included in the financing.


By leasing you:


■Optimize cash flow
■Conserve capital
■Improve budget planning
■Save personal credit for personal use
■Allow new equipment to generate income and pay for itself over time


Lease Terms

Capital Leases (you own the equipment at the end of the lease)

■$1 purchase option
The entire purchase amount is financed. At the end of the lease a $1.00 payment is made and the equipment is yours.

■10% purchase
Has the advantage of a lower monthly payment. At the end of the lease, a lump payment is made which is equal to 10% of the purchase price. Equipment is owned after 10% payment is made.

True Lease

■FMV (Fair Market Value)
This type of lease is a great way to stay ahead of rapidly changing technology and allows for upgrading to new equipment as is needed. FMV leases also allow you to expense your payments and accelerate depreciation. The equipment will be purchased at fair market value at the end of the lease term. Sometimes this is capped at 10%. Consult your tax advisor for other benefits.

Lease Terms

Although we can tailor lease terms to your specific needs, standard terms are from 24 – 60 months. A shorter time frame keeps financing costs lower. A longer term allows expensive but necessary equipment to be obtained with a low monthly payment.

How Does Leasing Work?

■Our approval process is based on a simple, one page application.
■Complete and fax to us the one page application, including information on the business entity, the equipment being purchased, the cost, and information on the vendor.
■Our credit department assesses the status of the applicant. The application may be approved within minutes or additional information may be requested. Once approved, we make great effort to provide you with the best possible rate and the lease terms requested.
■Lease documents, along with detailed instructions, are faxed or over-nighted to you for signature. A purchase order is sent to the vendor(s) once you are satisfied and have signed and sent back to us the appropriate documentation.
■Once the vendor has the purchase order, the vendor will ship the equipment and schedule installation. After successful installation, we call you for verbal verification that the equipment is in good working order. In some cases, a delivery inspection may be requested.
■After verbal verification, the vendor is paid in full and the lease starts.


Our lease specialists are dedicated to providing full service by being available to answer your questions at any time and to resolve any difficulties that may arise. At all times, control of the process is in the hands of the customer. The lease does not start until you specifically authorize us to pay the vendor, not before.

Where do I start?


Every lease begins with our easy one page application. Depending on the size of the transaction and credit considerations we may ask for additional information including some or all of the following:

■Personal Financial Statement
■Personal Tax Returns
■Business Tax Returns
■Recent Bank Statements
■Interim Financials
■Business Plan


Most of our transactions are application only and do not require additional documentation, but you should be assured that if we do request it, we are working hard to get you the lowest possible payment.

Why do you collect first and last payment? I had another leasing company tell me I could defer payment for 90 days.

We offer deferred payments as well, but we find that the vast majority of our physicians make the decision to pay the first and last when armed with all the facts. Deferred payment is a convenience, and like any convenience service, it has additional cost.

Leasing Ethics

EVERGREEN CLAUSES - If ever there was an aspect of equipment leasing which justaposed the legal with the unethical, the “evergreen clause” would be that area. An evergreen clause, or evergreen lease as the word implies, signifies a contract that goes on forever. In actuality, it can end, but only after the lessee sends, within a specified time period, a letter stating his intention to return or purchase the underlying equipment. In practice, the procedure is deliberately made cumbersome by the lessor. Hence, the lessee unwittingly pays in excess of the total price to which the parties agreed. Most lease and finance agreements have a $1.00 buy-out. This should nullify the chance of ever being “ever-greened.” Buy-outs of Fair Market Value not to exceed 10% fixed and a contract without any end position will have evergreen verbiage. These range from monthly automatic renewals going month to month or some automatically renew for 12 months. As a result the customer doesn’t recall 5 years prior what they signed. They keep getting invoices for the same payment amount and their A/P keeps sending the payments in. Months later they sometimes catch it, but it’s too late. They still have to give the leasing company 90 days notice. So now they have to pay 3 more payments then buy the equipment for the designated amount. Sound fair?

INTERIM RENT - The equipment is delivered on the 5th of March. The lease / finance contract defines the “delivery date” the “acceptance date” and the “commencement date.” All of which is very confusing. It states the lease payment will be due on the date specified by the lessor in the month following the commencement date. So they bill for the “interim period” which is from March 5th to March 30th, 25 days. Sounds nice and friendly – you only have to pay for a partial month. However, the lease doesn’t actually start until April 1st. At the end of the lease term they bill you again for the month of March. They get almost a full extra month payment, just for asking. All of this is perfectly legal as it is “stated” in your contract.

BLANKET LIENS - When you finance or lease a piece of equipment the lender will file a UCC Statement with the corresponding state where the lessee is incorporated. This insures ownership – the lender has the lien on that specific equipment. When the equipment is paid off, the finance company removes the UCC filing and sends the “release” to the customer and they take formal ownership of that equipment. There are some banks and finance companies that will file a blanket lien. This is a lien on everything that is located in the business or practice including accounts receivable. This means they essentially own everything in that practice whether the physician paid cash or owned it prior! Many times this will be the first piece of equipment financed and it is for a small amount, maybe $15,000. If the owner or physician ever wants to sell a piece of equipment they cannot get clear title if the bank or finance company has filed a blanket lien. And they own everything in that practice, because again, it’s in the contract. We only file a lien on the specific piece of equipment being leased. We never file a blanket lien.

FORCED INSURANCE - All leased equipment requires insurance. A company that finances leased equipment has ownership during the lease, but doesn’t actually have possession. If something happens to the equipment, the leasing company most make sure that all the payments will continue to be made. Most businesses carry adequate insurance and their policy can be amended to list the leasing company as “additional insured and loss payee” on the specific piece of leased equipment. Some leasing companies do not take the time to do this. Instead they “provide” insurance on the leased equipment through their chosen company and simply bill for the insurance coverage. You have no control over the cost, no ability to make changes, and will be paying twice to insure the same piece of equipment. An insurance charge will appear on the monthly lease payment … and good luck trying to remove it!

PREPAYMENT PENALTIES - It is our general policy to allow a lessee to prepay the lease rental payments before the expiration of the lease term assuming the lessee is and has been faithfully and promptly fulfilling the monthly payment obligation and our assigns. The payoff is calculated by determining the total equipment cost and service fees to be paid on the lease. After calculating this amount, a refund of unearned service fees is deducted from the aggregate payment schedule to determine the current payoff figure. We employ the bankers “Rule of 78s” to calculate the payoff amount. Many leases require you to pay the total of your lease payments regardless of when you prepay the lease. Our lease is more favorable than a lease of this type. There is no additional prepayment penalty added to the payoff calculations, however, it is recommended that you check with your accountant before considering an early payoff as it can affect the tax treatment of the lease. We further recommend that you wait until you are typically mid-way througfh your initial lease before considering a lease payoff since this lease is front end loaded on the service fee calculations.

Tell us about your goals, and we will help you understand the strategies you should consider. Contact us at 1-800-324-8808 or by email at mebailey@capital4healthcare.com.